Final report on FAS review of scheme assets
On 17 December 2007, the DWP published Andrew Young's final report on the Financial Assistance Scheme (FAS) review of scheme assets which began back in April last year. When the initial report was published in July, it prompted the Government to commit substantial extra funding to the FAS and to extend the assistance available to affected scheme members. The final report takes these changes into account, and makes a number of conclusions, such as:
- To provide a guaranteed benefit level, the best use of scheme assets would be for the Government to absorb the assets of affected schemes and making payments to FAS beneficiaries as they fall due
- Members of schemes wound up by solvent employers where a compromise agreement was put in place are in similar circumstances to those in schemes wound up by insolvent employers
As was the case with the publication of the initial version, the appearance of the final report prompted the Government to act yet again to improve FAS funding. On the day the Young report was released, Peter Hain, Secretary of State for Work and Pensions, announced in particular that FAS assistance will extend to 90% of a member's accrued pension rather than the existing level of 80%. He also announced that assistance will be extended to members of schemes which wound up underfunded within the relevant time period where the employer is solvent but a compromise agreement is in place. These extensions will cost an extra £935 million, in addition to the £2 billion which the Government has already committed to FAS.
Peter Hain confirmed that the final details of the recent proposals will be confirmed early this year, when legislation will be drafted to give effect to the new package of measures.
The DWP has also published The Financial Assistance Scheme - Review of cost estimates report which describes revised estimates of the costs of current levels of FAS assistance as announced in the 2007 Budget and the data and modelling improvements from an extensive model-development project involving the DWP, GAD and Pricewaterhouse Coopers.
The Young Report on the FAS Review of Schemes Assets is available at: http://www.thepensionsregulator.gov.uk/pdf/purpleBook2007.pdf
The Purple Book 2007 published
The Pensions Regulator and the Pension Protection Fund (PPF) have jointly published an up-todate picture of the UK's final salary pensions universe which affects more than 12.5 million people.
Known as "the Purple Book" (arising out of its formal title, Pensions Universe Risk Profile), it was first published in December 2006, and it is intended to increase knowledge and help understanding of DB schemes in the UK. It is an annual publication that pulls together the latest data and analysis of the final salary pension landscape, covering areas such as scheme size, industry-type, funding levels, rates of insolvency and the way assets are invested.
The revised version, known as the Purple Book 2007, also contains new information about the number and size of claims on the PPF, a breakdown of levy payments made by eligible schemes and the number of people benefiting from PPF protection.
The Purple Book 2007 is available at :http://www.thepensionsregulator.gov.uk/pdf/purpleBook2007.pdf
Pensions Tax Simplification Newsletter 32 published
At the end of December, HM Revenue & Customs published Pensions Tax Simplification Newsletter No. 32. Amongst other things, it contains a reminder that pension scheme administrators should register to use the Pension Schemes Online service as soon as possible, particularly in the light of the 31 January filing deadlines for Event Reports and Pension Scheme Returns (where required). The Newsletter also suggests that some administrators may think they have submitted their event reports online
When in fact they have not, and it explains the correct procedure for submitting a report (rather than merely saving it) online. The Newsletter also advises that the Registered Pension Schemes Manual has been updated and that the revised version was published on 4 December 2007. The revised version contains guidance on the pensions-related legislation contained in the Finance Act 2007.
Newsletter No. 32 is available at http://www.hmrc.gov.uk/pensionschemes/newsletter32.htm
Commencement timetable for Companies Act 2006
The Minister of State for Competitiveness, Stephen Timms, announced a revised timetable of the final commencement dates for the remaining provisions of the Companies Act 2006 that are not already in force. As announced on 7 November 2006, final implementation of the Act has been delayed until October 2009 (it was originally intended to be October 2008). However, certain provisions are still coming into force in October this year, including in particular the sections containing general duties of directors in respect of conflicts of interest, which will be relevant to directors of trustee companies. Other provisions of the Act likely to be of interest in relation to pension schemes include those relating to directors' exonerations and indemnities, and the new duty to promote the success of a company. These parts of the Act are already in force, having come into effect on 1 October 2007.
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